Multiple choice

Rahul deposits a certain amount of money which becomes three times in 10 years at simple interest, when the interest is calculated yearly. What is the rate of interest?

  1. 6%

  2. 15%

  3. 18%

  4. 20%

  5. 22.6%
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D Correct answer
Explanation

Simple Interest formula: A = P(1 + rt/100). 3P = P(1 + r*10/100). 3 = 1 + r/10. r/10 = 2, r = 20%.

AI explanation

Using the simple interest formula, let the principal be P. The amount becomes three times the principal, so the interest earned in 10 years is 3P minus P, which equals 2P. Applying the formula rate equals interest multiplied by 100 divided by the product of principal and time, the rate is 2P times 100 divided by P times 10. The rate of interest is 20 percent.

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